COMPROMISING, SCHOOL BOARD AGREES TO PUT BEFORE VOTERS A TAX LEVY $139,900 BELOW THE CAP

March 2, 2015 -- After completing its page by page review of the proposed 2015-16 budget at its meeting this past Thursday evening, the North Shore Board of Education decided on a tax levy for 2015-16 that is $139,900 below the tax cap established by New York State. The spending side of the budget remained unchanged from what had been discussed at the late January meeting – a 1.8% increase over last year for a total budget proposal of $97,575,530.38. Residents will have the opportunity to vote on the budget and the levy this coming May.

Much of the discussion on spending related to technology budget lines, for which K-12 technology director Eliot Kaye sat at the dais to answer questions. The overall approach, he said, was to insure that the district had the infrastructure in place to accommodate the rapid changes in technology. In total, the district anticipates spending $1,995,911.33 on technology next year, a 17.9% increase over what was budgeted for this year, but only about 1.35% greater than the $1,969,223 that was actually spent in 2013-14. The Board then directed its attention to revenue and the tax levy. Dr. Melnick stated that under the state’s complicated formula North Shore’s tax levy for 2015-16 is limited to $89,720,247 - a 2.087 increase over the current year. The numbers he and Assistant Superintendent Olivia Buatsi had submitted to the board for consideration represented a 1.815% increase in the levy, or $239,900 below the levy limit. The difference between the tax levy and spending, he said would be made up for with other revenue, including state aid, which the district anticipates will increase slightly this year, and using $700,000 of the $5.4 million that the district has received through the efforts of State Senator Carl Marcellino (SD – 5) and Assemblyman Charles Lavine (AD -13). Those funds were secured by the two legislators to mitigate the impact of any tax shift on residents resulting from a lower assessment on the National Grid property in Glenwood Landing, where demolition of the main power plant building appears to be close to completion. Dr. Melnick stated that the board could choose to further reduce the levy and withdraw more from reserves, or bring the levy closer to the limit, leaving more funds in reserve for the future. He explained that with uncertainty about the impact of the LIPA decommissioning, he was inclined to have a levy that was below the limit, but not so much below the limit that it would have a harmful impact on future budgets. Trustee Sara Jones pointed out that because each year’s tax cap is based on the previous year’s levy, reducing the levy below the limit would reduce each subsequent year’s levy limit by that amount with it compounding by about 2% annually. She said that perhaps the district ought to use only $500,000 of the state money this year, leaving more available in the future when the district has a clearer idea of the tax impact from the demolition of the power plant.

Board President Herman Berliner stated that he supported a levy below the limit, in light of uncertainties regarding the LIPA power plant decommissioning. Trustee Lara Gonzalez commented that residents received tax rebate checks from the state this year because the district had stayed within the tax levy limit when it put the budget up for a vote this past May, and noted that the amount she got back was equal to the amount of her property tax increase. She spoke in support of Trustee Jones' view, and said that district residents would not be impacted by a slightly higher tax levy, since that difference would be included in their rebate checks, so long as the levy remained within the limit, and the district satisfies this year's additional requirement that it demonstrate to the state that it has taken measures to increase efficiency. Assistant Superintendent for Business Olivia Buatsi said that the efficiency measures the district has implemented since 2012 should make residents eligible for the rebate. Trustee Marianne Russo stated that not everyone gets a rebate check. There was then discussion concerning which residents are eligible for rebate checks. Ms. Buatsi said that it was definitely more than half. The Trustees agreed to allow for public comment to get residents’ input on the issue before making a decision on where to set the levy. One resident said that he supported raising the levy to a level closer to the limit. Last year he said, the district had decided on a levy that was $300,000 below the limit, and that while it saved the average taxpayer about $2.50 a month in his tax bill, that monthly savings was offset by a lower rebate check, and that the lower levy reduced every future levy limit by $300,000. He added that households earning under $500,000 annually are eligible for the property tax rebate. Another resident asked about the cumulative impact on the next five year's tax levies of coming in $239,000 below the limit this next year. Dr. Melnick replied that it would amount to more than a million dollars. A third resident asked whether the district had heard of what the tax implication would be for next year as a result of the demolition of the LIPA power plant. Dr. Melnick stated that the district was uncertain at this time. When the issue was raised again during a second public comment period, the Superintendent again expressed uncertainty and said the district’s lawyers and lobbyists were still working on a legislative solution that would create a gradual shift in tax obligation from the utility to residential taxpayers. There were concerns, he said, that real property tax law 1803a, which limits the tax shift from one property tax class to another, does not apply when the buildings on the property are demolished. When the board resumed its discussion, President Herman Berliner asked for a motion to set the tax levy. Trustee Jones moved that the levy be set at $39,900 below the levy limit, rather than $239,900, saying that the adjustment would have "minimal if any impact on taxpayers." Trustee Marianne Russo stated that she believed the levy should be below the levy limit, presumably $239,900 under. With uncertainties regarding LIPA, she said, it would help protect taxpayers.

Trustee Jones said she agreed that the district should stay under the levy limit, but that with the rebate system returning property tax increases to residents, the district did not have to be that conservative.

President Berliner said he supported a levy that was $239,000 below the limit, with uncertainty about LIPA and to demonstrate to tax payers that the district was being as fiscally responsible.

Trustee Toni Labatte offered a compromise proposing that the resolution be amended to reduce the levy by another $100,000 or $139,900 below the limit. The motion to amend Trustee Jones’ resolution passed unanimously. The motion to file with New York State a proposed tax levy increase of 1.93%, or $139,900 below the limit, was approved by a 5 to 1 vote, with Trustee Russo in the minority.

This will be the second straight year, and the third of the past four, since the tax cap law went into effect, that the board will have put before voters a tax levy that is significantly below the limit. BACK TO WEEKLY